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UPDATE 1-Chevron taps Mike Wirth to be next CEO as Watson retires

(Adds transition, stock details)

HOUSTON, Sept 28 (Reuters) - Chevron Corp's Vice Chairman Mike Wirth will become chief executive next February, replacing the retiring John Watson, the oil and natural gas producer said on Thursday.

The transition brings an executive with experience in the cost-cutting world of refining to the top spot at one of the world's largest oil and natural gas companies.

Reuters reported the change of leadership last month, citing a source close to the matter.

Wirth, an engineer by training, has worked at Chevron since 1982 and previously ran the company's pipeline and chemicals and refining businesses.

Wirth "has the right business experience and leadership qualities to extend the companys success, and the board has full confidence in his ability to do so," Ronald Sugar, Chevron's lead director, said in a statement.

Wirth, 56, will also become chairman of the board.

Watson, who will not hit the company's mandatory retirement age of 65 for another four years, sees the change as an opportunity to hand over the reins of a growing enterprise to Wirth, the source told Reuters last month.

"I have been blessed to have had the extraordinary opportunity to lead Chevron, and I will miss my daily interactions with our dedicated employees around the world," Watson said in a statement on Thursday.

Last year, Watson earned $24.6 million in pay, share options and bonuses, up from $22 million in 2015. Wirth was paid $9.1 million last year, up from $8.1 million in 2015.

Shares of Chevron rose slightly after the opening bell on Thursday to $117.49. (Reporting by Ernest Scheyder; Editing by Bernadette Baum and Susan Thomas)